Thread: learning how to save

Hello mciau!

First thing I would do is to check your current credit history. You can do this online (usually for a small fee), or speak with a mortgage broker, or banker.
I'm not sure of the mortgage situation in the states-- but in Canada, you are looking of about a minimum score of about 600 to qualify for a mortgage.

If your credit score looks good, and you are steadily employed: you should consider talking to a mortgage broker about your ability to qualify for a mortgage. Mortgage brokers will look at your employment status and history. This involves looking at your gross monthly income and the length of your employment (usually 2 years of steady work). They also look at your credit history (any debts you have, debt balances versus your credit limits, how you handled debt in the past, missed payments, late payments, etc.), your assets (stocks, bonds, personal property), and the value of the property you want to purchase. Mortgage brokers are sometimes able to help you build a down payment through special programs. In Canada there is a RSP program that can do this-- again, I don't know if this is the same for the States.
Certain regions also sometimes offer housing assistance programs for first time buyers. In my area you can receive a $10,000 grant to be used as downpayment if you qualify. Talk to your local housing authority.

Other things to consider:
- Closing costs typically range between 2-5% of your mortgage loan and include things such as land transfer, title policies or insurance, recording fees, inspections, attorney's fees and lenders fees. This works out to approximately $3,500 to close for a $250,000 home purchase.
- A deposit is usually required at the acceptance of the agreement of purchase (at the time your offer is accepted by the Seller). Deposits usually start at around $1,000.
- Lenders usually require that monthly payment ranges for your mortgage be between 25-8% of your gross monthly income. This would include the principal on your loan (P), the interest on your loan (I), property taxes (T), and homeowner's insurance (I). You monthly PITI payments (as these are called) plus all of your debt payments should range between 33-38% of your gross monthly income.

You don't need an accountant, and I wouldn't advise making rash investments if you are having credit issues. Pay your bills on time and consolidate any debt you may have. Fixing these and other small errors on your credit report can make a huge difference in your score in as little as a year.
Track all your expenses for a week or so. Make a budget and STICK to it.

I hope this answers some of your question. Realtors are not credit counsellors or mortgage brokers- so you are best to talk with the experts themselves for detailed advice!

I have also problem on how to save and manage money but someone told me that in managing the money we must considered our budget and the total income we must spent.